Fox Deal Concerns Drove 17% Post-Announcement Drop, Fund Says

Fox fell 17% in the trading session after announcing a $22 billion agreement to acquire Roku, according to TCW Relative Value Mid Cap Fund’s second-quarter investor letter. The fund said investors were concerned about the deal’s size, debt financing and potential dilution of existing shareholders.

The agreement calls for a mix of cash and stock, the letter said. Fox was among the fund’s weakest performers during the quarter.

Fox closed at $62.65 on Sept. 30, according to the article. As of 14:14 UTC on Oct. 1, the shares traded at $61.86, down 1.27% since the previous close.

The fund reported a 14.10% return for the quarter, compared with 13.40% for its index. It said stock selection contributed positively to performance.

The article also said the Justice Department was deepening its review of the proposed Roku acquisition. It provided no further details on the review or a timeline for the deal.